Financial Audit: Examination of IRS' Fiscal Year 1993 Financial
Statements (Letter Report, 06/15/94, GAO/AIMD-94-120).

An audit of the Internal Revenue Service (IRS) reveals that the agency
is hampered by serious, pervasive financial management problems,
including the inability of antiquated systems to generate reliable
financial information needed to manage IRS operations. GAO is unable to
express an opinion on the reliability of IRS' fiscal year 1993 Principal
Financial Statements. Critical supporting information for seized assets,
accounts payable, and collection by type of tax was unavailable, and
supporting information for in-process revenue transactions, tax credit
balances, and funds with the Treasury Department was not properly
analyzed and recorded. Additionally, most financial statement balances
were plagued by errors in revenue and operating funds transactions. This
report discusses the scope and severity of IRS' financial management and
control problems, the adverse impact of these problems on IRS' ability
to effectively carry out its mission, and IRS' actions to remedy the
problems. GAO makes recommendations to help IRS continue its efforts to
resolve these long-standing and difficult problems and strengthen its
financial management operations.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  AIMD-94-120
     TITLE:  Financial Audit: Examination of IRS' Fiscal Year 1993 
             Financial Statements
      DATE:  06/15/94
   SUBJECT:  Accounting procedures
             Federal agency accounting systems
             Auditing standards
             Financial records
             Internal controls
             Financial management
             Noncompliance
             Tax administration
             Financial statement audits
             Accounts receivable
IDENTIFIER:  TSM
             IRS Tax System Modernization Program
             IRS Taxpayer Compliance Measurement Program
             
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